Topic: THE RIBA: An Alternate Perspective Posted: 01 April 2014 at 12:44pm

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“WHAT IS ” الرِّبَا ” (THE RIBA)?AN
ALTERNATE PERSPECTIVE”

T.O.
SHANAVAS. MD

We, the
members of Islamic center of Greater Toledo, OH took 3 million dollar bank loan
for initial construction of the mosque in 1981and also 2.5 million dollars for
later expansion of the center contrary to Muslim mindset against taking
and paying bank interest. I have taken a mortgage for my home,
not because I cannot afford to pay in front but it makes economic sense (also The
Qur’an 7:31
advises me: “…but do
not waste: verily, He does not love the wasteful!”)

Let
me state explicitly: Let
there be no doubt that the Quran categorically
prohibited ” الرِّبَا ” (THE
RIBA), “O you who have
believed, do not consume ” الرِّبَا
” (THE RIBA), ...”
(3:130). “Allah has
permitted trade and has forbidden Riba “ (2:275).Then
what is the rationale to go against Muslim
consensus (ijma) on bank interest? It is based upon multiple
observations of which 6 are listed below:

1.Muslim
consensus gives a special status to cash/ currency as compared to all other
assets.

2.Ummar
Ibn-Kathab’s statement on ” الرِّبَا ”
(THE RIBA),

3.conflicting messages from hadiths collections

4.The
definition of ” الرِّبَا ”
(THE RIBA) by eminent early Muslim
scholars

5.Definition of The Riba in al-Jāhiliyyah
(Pre-Islamic Arabia).

6.The
Quran

Muslim
consensus gives a special status to cash/ currency as compared to all other
assets.

A simplified
definition of interest is a fee paid by a
borrower of assets to the creditor
as a form of compensation for the use of the assets. Scholarly voices from
Muslim countries without free press draw a boundary line between cash and other
assets. It restricts the rent of cash illegitimate
or haraam and makes the rent of all other assets legitimate or halaal.
This artificial bifurcation, cash being separated from other assets, is
completely baseless due to the following reasoning:

(A). None
of branches of knowledge directly related to assets e.g. accounting, economics
and commerce recognize it. Even in ordinary life it is not so, same treatment
is given to cash and all other assets throughout the world in theory as well as
in practice. First of all, this artificial bifurcation of asset is not admitted
throughout the world neither in theory nor in practice and hence does not exist
in the real world.

(B). The handpicked
religious scholars of the autocratic Muslim countries decreed that assets,
which depreciate, could be rented. So, all assets that are depreciated with the
passage of time can be given on rent. But this rule is not admitted in the case
of cash / currency, even though currency is also depreciated with the passage
of time due to inflation. Hence here also the unnatural division is a
completely self- contradictory concept.

(C). The most important point is that, the
Quran is also not ready to accept this baseless concept of artificial
bifurcation. The simple proof of this fact is that the Quran has used the term mal

(مَالَ)for all assets that include cash. Quran has used the
word 86 times but it is never used exclusively for cash anywhere in the Quran. Hence
the Quran does not support this strange concept of bifurcation.

According to the so-called “Islamic financing,”
renting an asset or apartment or other commodity is halaal and renting cash haraam.
For example, renting of $ 100,000 for buying a home at the current 4% yearly
interest rate costs $ 4000 interest even without expected 33% US tax decrease
on it.Renting $ 100,000 apartment costs the renter
about 500 dollar/month = 6000 dollar/year is halaal. The renter owes more money to apartment owner than to a bank
and still apartment renting is halaal
and renting currency is haraam.

Islam’s position regarding justice is unequivocal and
universal. “O ye who
believe! Stand out firmly for justice, as witnesses to Allah, even as against
yourselves, or your parents, or your kin, and whether it be (against) rich or
poor: for Allah can best protect both. Follow not the lusts (of your hearts),
lest ye swerve, and if ye distort (justice) or decline to do justice, verily
Allah is well- acquainted with all that ye do.” [Quran 4: 135].Who is the most just and more honorable in
this instance? The one who rents an apartment for more money or a bank that
rents the money for less and at the same time promotes saving?

2. UMAR IBN KHATAB (RA): Riba
related verse was the last verse revealed and Prophet (S) did not explain it in
detail.

`Umar delivered a sermon on the pulpit of Allah's
Messenger (RA), saying, "Alcoholic drinks were prohibited by Divine Order,
and these drinks used to be prepared from five things, i.e., grapes, dates,
wheat, barley and honey. Alcoholic drink is that, that disturbs the mind." `Umar added, "I wish Allah's Apostle had not left us
before he had given us definite verdicts concerning three matters, i.e.,
how much a grandfather may inherit (of his grandson), the inheritance of
Al-Kalala (the deceased person among whose heirs there is no father or son), and various types of Riba."

So, most Muslim believe that the Quran or Prophet (s) did
not explain ” الرِّبَا ” (THE
RIBA)”. Initially let me quote few Hadiths pertinent to our discussion.

A selective reading of the
Set of Hadiths 1-5 definitely seems to endorse the opinion on ” الرِّبَا ” (THE RIBA)” held by most mosque
communities that all forms of bank interest are prohibited.But a parallel reading of the Set Hadith 1-5 and the Set of Hadith A-E leads to
different or at least six kinds of “holy truths.”

Initially let me quote the Set of Hadith 1-5that Muslims use to endorse the point of
view that all Riba or Interest
in finance is haraam.

Hadith # 1

Jabir said that Allah's Messenger (may peace be upon him)
cursed the accepter of the Riba
and its payer, and one who records it, and the two witnesses, and he said: They
are all equal. (Muslim: Book #010, Hadith #3881)

Hadith # 2.

Narrated 'Aun bin Abu Juhaifa: My father bought a slave
who practiced the profession of cupping. (My father broke the slave's
instruments of cupping). I asked my father why he had done so. He replied,
"The Prophet forbade the acceptance of the price of a dog or blood, and
also forbade the profession of tattooing, getting tattooed and receiving or
giving the Riba."
(Bukhari: Book #34, Hadith #299).

Hadith # 3

From Anas ibn Malik: The Prophet said: “If a man extends a
loan to someone he should not accept a gift.” (Mishkat, op. cit., on the
authority of Bukhari's Tarikh and Ibn Taymiyyah’s al-Muntaqa)

Hadith # 4.

Narrated Abu Burda: When I came to Medina. I met Abdullah
bin Salam. He said, "Will you come to me so that I may serve you with
Sawiq (i.e. powdered barley) and dates, and let you enter a (blessed) house
that in which the Prophet entered?" Then he added, "You are In a country
where the practice of Riba is prevalent; so if somebody owe you something and
he sends you a present of a load of chopped straw or a load of barley or a load of provender then do not take
it, as it is Riba." (Bukhari:Book #58, Hadith #159)

Hadith # 5

Abu Sa'id al-Khudri (Allah be pleased with him) reported
Allah's Messenger (may peace be upon him) as saying: Gold is to be paid for by
gold, silver by silver, wheat by wheat, barley by barley, dates by dates, salt
by salt, like by like, payment being made hand to hand. He who made an addition
to it, or asked for an addition, in fact dealt in the Riba. The receiver and the giver are equally
guilty. (MUSLIM: Book #010, Hadith #3854)

Summary of the
above hadiths:

1.Any addition over the loaned capital during
the term of loan is haraam.

2.The Creditor cannot accept or the debtor cannot
offer even a gift because gift become the riba.

The following Set
of Hadiths A-E challenges and contradicts above Set of Hadiths 1-5 and its derived conclusions:

Hadith A

Narrated Jabir ibn Abdullah: (1) Narrated Jabir bin
'Abdullah: I went to the Prophet in the mosque

(the sub-narrator Mas'ar thought that Jabir had said,
"In the forenoon.") He ordered me to pray two

Rakat. He owed me some money and he repaid it to me and gave more than
what was due to me.

Abu Huraira (Allah be pleased with him) reported: There
came a person demanding a camel from Allah's Messenger (may peace be upon him).
He (the Holy Prophet) said: Give him (the camel) of that age or of more mature age, and said: Best among you
is one who is best in clearing off the debt. (MUSLIM: Book #010, Hadith #3900)

Hadith C

“Malik related to me from Humayd ibn Qays al-Makki that
Mujahid said, "Abdullah ibn Umar borrowed some dirhams from a man, then he
discharged his debt with dirhams better than them. The man said, 'Abu
Abdar-Rahman. These are better than the dirhams which I lent you.' Abdullah ibn
Umar said, 'I know that. But I am happy with myself about that.'…" Malik’s
Muwatta: Book #31, Hadith #31.42.91

Hadith D

Narrated
Abu Rafi':

“The
Messenger of Allah (s borrowed a young camel, and when the camels of the
sadaqah (alms) came to him, he ordered me to pay the man his young camel. I
said: I find only an excellent camel in its seventh year. So the Prophet (s)
said: Give it to him, for the best person is he who discharges his debt in the
best manner.” (Jami Al- Tirmidhi, Kitab al-Buyu, v.6, #56]

Hadith E

Narrated Al-A'mash: We argued at Ibrahim's dwelling place
about mortgaging in Salam. He said, "Aisha said, 'The Prophet bought some
foodstuff from a Jew on credit and the payment was to be made by a definite
period, and he mortgaged his
iron armor to him." (Bukhari: Book #35, Hadith #454)

Narrated 'Aisha: The Prophet died while his armor was mortgaged to a Jew for thirty Sa's of
barley. (Bukhari: Book #59, Hadith #743)

This type of mortgaging or using pawnbroker’s service was
recognized as Islamically valid and acceptable, as illustrated through this
hadith.

Summary of Hadith A-D:

1. Contrary to the
set of Hadiths 1-5 quoted above, the
set of Hadith A-E shows the Prophet (s) and Ummar (ra) giving extra amount
over and above than they borrowed. By the definition of the Muslim scholars of “so-called
Islamic financing,” the extra “giving” of Prophet (s) and Ummr (ra) in this
instance becomes ” الرِّبَا ”
(THE RIBA).

2. It is illogical to believe that the Jew extended loan to
Prophet (s) without interest) because Jewish Scripture freely allow the
creditor Jew to charge interest: “Thou shalt not lend upon usury to thy
brother, usury of money, usury of Victuals, usury of anything that is lent upon
usury. Unto a stranger thou Mayest lend upon usury….” (Deuteronomy 23: 19-20).

Prophet (s) was well known among
his people for honesty long before his prophethood, and used to be
called "al-ameen" (the trustworthy). This is a name that
would not be given except to one who was extremely truthful, trustworthy and
upright. In spite of it, Prophet (s) had to mortgage his armor to the Jew to
borrow food suggesting that the Jew did not trust Prophet (s). And therefore it
is farfetched to assume that such a Jew offered food to Prophet (s) on
credit and did not benefit from the transaction, and if he did, then isn't that
riba?

After reading
these two sets of Hadiths (1-5 and A-E) following can be stated:

1 The two sets
of hadiths (1-5 and A-E) on “The Riba” are contradictory and is problematic and
so there are no supporting crystal clear evidence for the “haraamization” of every kind of interest(riba) in financing business.

2. The Set of Hadith
1-5 is authentic and the Set of Hadith
A-E is not and so all interest in the business of finance are Haraam (sinful).

3. The Set of
Hadith A-E is authentic and the set of
Hadith 1-5 is not, and so bank interest (riba) is Halaal.

4.The Set of Hadith
A-E is before the prohibition and the
set Hadith 1-5 after the prohibition of the Riba by God and so all forms of
riba is prohibited.

5. There is no definitive information or corroboration to
support the view that the set of Hadith
A-E is from a time before the revelation of “ al---Riba (” الرِّبَا. ” The
Riba verses were revealed after conquest of Mecca. Moreover as shown previously, there is no reason to believe that the
Jew extended the loan to Prophet (s) without interest (riba) and Prophet (s)’
armor remained mortgaged until his death. As customary in those days, the Jew
must have collected the interest (riba) on the loan. Prophet (s) died without
recovering the armor by paying the loan.
All these points contradict # 4 statement.

6. Yet another
inference can be made bonding both sets of Hadiths together.Based on the two sets of Hadiths (1-5 and A-E), “ al---Riba (” الرِّبَا ”
in the Quran is not synonymous with the extra paid by Prophet (s) and Ummar
(ra). We conclude the extra payment (interest) over and above the borrowed capital
is permissible and at the same time “ al---Riba (” الرِّبَا ” is
prohibited. It also eliminates artificial contradiction between the two sets.For those Muslims who uncritically
accept hadith collections as holy truth,such an understanding of the two
sets of Hadiths (1-5-and A-E) helps to preserve their blind faith in the
authenticity of “Sahih Hadiths” of
Bukhari and Muslim and protects hadiths collections becoming da’if (weak) for them.

The Quran
and “ al---Riba (” الرِّبَا .”

The commonly
held Muslim consensus is that the Qur’an does not define“
al---Riba (” الرِّبَا .”This
judgment contradicts the Quran. The Quran states that the God spelled out the “easy to understand Quran” (54:17) as the “guide
for the pious”
(2:2) to lead “to
the path which is clearer and straighter than any other” (54:17) by “clarifying every matter.” (16:89).
Therefore,there is no
better source than the Quran “to clarify every matter,” including the “
al---Riba

(” الرِّبَا .”)

God’s speech is never redundant or arbitrary. If anyone
claims redundancy in letter and word in the Quran it undermines the divine
authority of the book. It is
impossible to take away or ignore a single word or to even remove single
particle from the text without seriously damaging the integrity of its
meaning.Likewise, every attempt to
restructure the syntax of the text, for example by ignoring or moving a word
forward or backward would significantly alter the meaning substantially. Every
letter, word, and its location in the Divine Speech are precise and purposeful.
All have a specific function and meaning. So, let us look at the phrase “al—Riba

(” الرِّبَا ”).

In order to understand “ al---Riba (” الرِّبَا ” in
the Quran, we initially need to define the word, riba. According to Lisan Al
Arab, a classical Arabic dictionary, the grammatical declination of the noun riba is derived from the verse “raba” which means “increased or grew.”
Therefore, any increase in borrowed capital can be defined as riba. If we do not make clear
distinction between generic “riba” and “al—Riba (” الرِّبَا ”), then an
act of making profit out of buying and selling in trade becomes prohibited
activity. But any sort of increase or raise or riba is not ” الرِّبَا ”
(THE RIBA) that is prohibited by shariah.
All the verses of the Quran regarding the prohibition of the riba mentions it
as “al—Riba (” الرِّبَا ”), that is with the definite article “al (الْ).” The certainly the definite
article, “al (الْ)”, here is not
indefinite or generic, otherwise every form of monetary increase, such as
business profit would have been prohibited. So, “al ((الْ)” here means a specific and some special kind of increase
that has been prohibited under shariah.

In order to demarcate “al—Riba (” الرِّبَا ”) from
the generic “riba,” the Quran
assigned two properties to“al—Riba (”
الرِّبَا ”). They are: 1.
Extortion of people’s wealth by demanding “doubling
or multiplying” the borrowed capital (Quran 3:130) if the borrower cannot
return the capital at the end of the term (See explanation below); and 2. “consuming
people's property unjustly” in verse(4:161).
al—Riba (” الرِّبَا ”) has this “unjust”
character because a Muslim is expected to be kind and compassionate to a fellow
being in trouble.

So based on these Quranic criteria, every kind of riba or
increase or interest on capital is not al---Riba (” الرِّبَا ”). al---Riba (” الرِّبَا ”) is the customary practice of doubling or multiplying
of the obligation of the debtor if he/she makes default at the end of the term
of the loan. According to Imam Al-Razi quoted below, the creditor collect
interest every month and then ask to return the capital in full at the
previously set date and if not given, creditor increase the obligation of the
debtor. Such an understanding of “al---Riba (” الرِّبَا ” was recorded
by Tabari and others in the classical Islamic period. For example:

(A).Imam Fakhr al-Din al-Razi (d.
606) in his Tafsir al-kabir had describes very clearly the customary practice
of lending and borrowing. He stated that Pre-Islamic Arabs used to charge
interest on borrowed money and at end of the term of loan if the creditor
cannot pay the creditor increased the capital owed by the debtor. This increase
is “al---Riba (” الرِّبَا ”

"As for the riba
al-nasi`ah, it was a transaction well-known and recognized in the
days of Jahiliyyah, i.e., they would advance money on the basis that they will
take a specified amount every month and the principal will remain due. Then on
the date the debt became due, they demanded the debtor to pay the principal. If
payment became impossible (or hard), they would increase the term and the
payable amount. So this was the riba people practiced in the time of
Jahiliyyah.”

(B) Explaining the meaning of the term used in
verse 3:130 (O you who
have believed, do not consume“ al---Riba (” الرِّبَا ”,
doubled and multiplied, but fear Allah that you may be successful.”),
Tabari (d.310 AH), the well known commentator on the Qur’an, says:

“Do not consume riba after having professed Islam as you
have been consuming it before Islam. The way pre-Islamic Arabs used to consume
riba was that one of them would have a debt repayable on a specific date. When
that date came the creditor would demand repayment from the debtor. The latter
would say, ‘Defer the repayment of my debt; I will add to your wealth.’ This is
the Riba which was doubled and redoubled.”

(C)The way in
which riba was doubled and redoubled in the pre-Islamic period is expressed by
the son of Zayd b. Aslam (d.136 AH) as follows:

“The Riba in the pre-Islamic period consisted of the
doubling and redoubling [of money or commodities], and in the age [of the
cattle]. At maturity, the creditor would say to the debtor, ‘Will you pay me,
or increase [the debt]?’ If the debtor had anything, he would pay. Otherwise,
the age of the cattle [to be repaid] would be increased
. . . If the debt was money or a commodity, the debt would be doubled to be
paid in one year, and even then, if the debtor could not pay, it would be
doubled again; one hundred in one year would become two hundred. If that was
not paid, the debt would increase to four hundred. Each year the debt would be
doubled.”

(D).This type of riba (“al---Riba (” الرِّبَا
” ) is known as Riba al-jāhiliyyah, and according to some Islamic scholars,
such as Imam Ahmad Ibn Hanbal (d. 241/855), only such Riba is undoubtedly
unlawful from the Islamic viewpoint. Ibn Qayyim al Jawziyya (d. AH 691) describes the views
of Ibn Hambal as follows:

that term means, beyond contrasting riba and charity and
mentioning exorbitant ‘doubling’. Commentators describe a pre-Islamic practice
of extending delay to debtors in return for an increase in the principal (riba
al-jāhiliyyah). Since this practice is recorded as existing at the time of the
revelation, it is one certain instance of what the Qur’an prohibits. Hence Ibn
Hanbal, founder of the Hanbali School, declared that this practice—‘pay or
increase’—is the only form of riba the prohibition of which is beyond any
doubt.”

“Malik related to me that Zayd ibn Aslam said, ‘Riba in
the Jahiliyya was that a man would give a loan to a man for a set term. When
the term was due, he would say, “Will you pay it off or increase me?” If the
man paid, he took it. If not, he increased him in his debt and lengthened the
term for him”. (REFERENCE: Imam
Malik, Muwatta, # 61)

(F).al-Baghawi
(d. 510 Hijrah ) repeats the same understanding in his Qur’anic commentary on
verse 277 of al-Baqarah as he narrates a tradition from Ikrimah (d. 107 AH) and
Ata (d. 117 AH), which offers the same definition in the sense of which Riba
was used:

“Regarding the word of God: ‘O believers! Fear God and
forgo what remains of al-riba’,ʿAta and ʿIkrimah said that this verse revealed
in connection with [the dealings] of al-ʿAbbas ibn ʿAbd al-Muttalib and Uthman
bin ʿAffan, may Allah be pleased with them. These
persons used to make advance deals about dates in advance before the ripening
of the crop [i.e., they used to buy dates in advance with cash or with dates]. After the
ripening of dates the owner would say that if you two exercise your right, nothing would be left for the
sustenance of my family; would you agree to take only half of the agreed quantity
and leave the remaining half which I will pay in double quantity next season.
So they agreed to this. When the appointed time came, they demanded the increase. When the Prophet heard about it, he prohibited
it and the said verse was revealed.”

(G) Abdullah Saeed, Professor of Arabic and Islamic
studies, University of Melbourne, Australia further refers to Zamakhshari (d.
549 AH)12 and Baydawi (d. 691 AH) in the same way.He also mentions Ibn al-Arabi (d. 543 AH) in
the same vein. “al---Riba (” الرِّبَا ”was well known among the Arabs.

‘Riba was well known among the Arabs. A person would sell something
on a deferred payment basis. Upon maturity the creditor would say [to the
debtor]: ‘Will you pay [as agreed] or will you add an amount to the [original]
debt?’

(REFERENCE: Ibn
al-Arabi quoted in A. Saeed, 23.)

Therefore, Riba prohibited in the Qur’an is the
Pre-Islamic practice of al---Riba (” الرِّبَا
”) or the Riba al-jāhiliyyah of doubling and tripling of the capital obligation
of the debtor.The injustice and
exploitation involved in such “al---Riba (” الرِّبَا ” transactions are
obvious, and hardly require any further explanation or rationalization.

Summary:

The meaning of al---Riba (” الرِّبَا ”) is
“extortionate claim over the property of the debtor by the creditor.” That is
why the Quran characterizes such extortion as “their consuming people's property unjustly” in verse(4:161).

”
الرِّبَا ” (THE RIBA) verses

Now let us study the verses on al---Riba (” الرِّبَا ”)
in the Quran based on what I have explained above.

“Their taking الرِّبَا
” (THE RIBA which was prohibited for them, and their consuming people's
property unjustly. For the unbelievers among them, We have prepared a painful
torment.” (4:161)

The verse was a reference to Jews who charge ” الرِّبَا ” (THE RIBA) against Jewish
Scriptural directive on their Jewish brothers:

“…Take thou not usury of him, or increase: but fear of
God; that thou brother may live with thee….” (Leviticus 25:35-7)

The Quran 3:130

“O you who have
believed, do not consume الرِّبَا ”
(THE RIBA, doubled and multiplied, but
fear Allah that you may be successful.

The customary
practice of الرِّبَا ” (THE RIBA)
was not limited to cash transactions only but also in commodity transactions. Pre-Islamic
Arabians practiced a kind of futures market, not exactly as practiced today. Current futures market is a central financial
exchange where people can trade standardized futures contracts, that is, a
contract to buy specific quantities of a commodity or financial instrument at a
specified price with delivery set at a specified time in the future. Similarly,
Arabs traders including prominent companions of Prophet (s) advanced
grain or fruits or other commodities to the farmers the long before harvest was
due along with an oral agreement to give back the traders certain amount of
grain or fruits after his harvest at a specified time. If the farmer could not
deliver his promise either due to crop failure or other reasons the trader
doubled or even more the amount grains or fruit to be delivered for the extension
delivery date. The increase depended solely on the whims of the trader.

The prophet
(s) prohibited the practice of the futures market or contract of Pre-Islamic
era. For example, with unripe dates: “Ibn 'Umar (Allah be pleased with them)
reported that Allah's Messenger (may peace be upon him) forbade the sale of
palm-trees (i. e. their fruits) until the dates began to ripen,
and ears of corn until they were white and were safe from blight. He forbade
the seller and the buyer. (Muslim: Book #010, Hadith #3666)

If we closely look at the Hadith # 5 quoted above along
with another hadith, what I said becomes very clear.

“…Prophet
had said, 'There is no riba when
it is not done from hand to hand (i.e. when there is no delay in payment).'
" (Book #34,
Hadith #386)
Bukhari. ” الرِّبَا ”
(THE RIBA) happens
only on delayed payment.

Now read the Hadith #5. “Prophet said; Gold is
to be paid for by gold, silver by silver, wheat by wheat, barley by barley,
dates by dates, salt by salt, like by like, payment being made hand to hand. He
who made an addition to it, or asked for an addition, in fact dealt in ” الرِّبَا ” (THE RIBA). The receiver
and the giver are equally guilty.”

Professor Mohammad
Omar Farooq exclaims:“We need to
ask, who in the world did or does exchange an ounce of wheat, barley, dates,
gold salt etc., of exact quantity and of same quality? What would be the
rationale for exchanging a pound of barley with another pound or kilo of the
same quality? If the orthodox position or understanding is considered valid,
here it seems that the Prophet has permitted a kind of transaction that people
have no reason to engage in. Usually, permission of Prophet (s) involves
something that people usually do or need. In this case, none of those
possibilities apply. People without any sense will exchange an equal amount of
the same quality of wheat in trade. How in the world the Prophet would permit
something that people cannot be expected to sensibly engage in real life? This
is clearly a trivialization of the Prophet's guidance.” (REFERENCE:Dr. Mohammad
Omar Farooq “Riba, Interest and Six
Hadiths: Do We Have a Definition or a Conundrum?”

On the other hand, it will make lots of sense only if
Prophet (s) is talking about Pre-Islamic form futures market and the extortionate
increase of capital obligation of debtors, ” الرِّبَا ” (THE RIBA), when the farmer is unable to deliver
wheat that he borrowed .

The Quran 275-280

2:275-276. Those who live on ” الرِّبَا ” (THE RIBA) will not rise up before Allah except like
those who are driven to madness by the touch of Shaitan. That is because they
claim: "Trading is no different than ” الرِّبَا ” (THE RIBA), but Allah has made trading lawful and ” الرِّبَا ” (THE RIBA) unlawful. He
who has received the admonition from his Rabb
and has mended his way may keep his
previous gains; Allah will be his judge. Those who turn back (repeat this
crime), they shall be the inmates of hellfire wherein they will live forever. Allah
has laid His curse on ” الرِّبَا ”
(THE RIBA) and blessed charity to prosper. Allah does not love any ungrateful
sinner.

O ye
who believe! Observe your duty to Allah, and give up what remaineth (due to
you) from usury, if ye are (in truth) believers. If you will not give up ” الرِّبَا ” (THE RIBA), which you
demand, know that you are in the state of war with God and His Messenger. But
if you repent, you will have your capital. Do not commit injustice and no
justice will be done to you.” If the debtor is in a difficulty, grant him time
till it is easy for him to repay. But if ye remit it by way of charity, that is
best for you if ye only knew.”

The
Qur’an 2:282:

“O you who believe! When you deal with each
other in contracting a debt for a fixed time, then write it down;…” because not
only that the practice of ” الرِّبَا ”
(THE RIBA) is unjust, it is also based only on oral agreement granting freedom
to “double or multiply” the
obligation from the debtor in trouble by the whims of the creditor.

Comments:

1. All
remaining part of ” الرِّبَا ”
(THE RIBA) after this last revelation annulled.

2. If
any one will not “give up what remaineth (due to you) from ” الرِّبَا ” (THE RIBA),” you are in the state of war with God and His Messenger
(s).

3. Creditor
can collect the capital If the debtor is financially solvent.

4. If
the debtor is in a difficulty, grant him time till it is easy for him to repay.

1. Most Muslims believe that the ” الرِّبَا ” (THE RIBA) verses were the last verses revealed.

2. Prophet (s) did not live long enough to explain the
phrase, ” الرِّبَا ” (THE RIBA)

3. Most
Muslims believe the Set of Hadiths 1-5 prohibits ” الرِّبَا ” in general.

4. The Set of Hadith
A-D allows paying extra with the return of borrowed money or

commodity.

5. There are instances when Prophet (s) and Ummar (a) paid
more than they borrowed.

So, ” الرِّبَا ” (THE RIBA) and the interest
paid in the current banking practice are not one and

the same.

6. All the verses of the Quran regarding the prohibition
of the riba mentions it as” الرِّبَا ”

(THE RIBA), that
is with the definite article “al (الْ).”
The certainly the definite article,

“al (الْ)”, here is not indefinite or
general. So, the “al (الْ)” here means
a specific and some

special kind of increase that has been
prohibited under shariah.

7. ” الرِّبَا ”
(THE RIBA), that is prohibited in the Quran, is the customary extortionate
increase of

borrowed capital at the end of the loan by pawnbrokers
for the extension of the loan repayment term. It is levied in Arabian futures
market also if the commodity dealer was unable to deliver the commodity at the
agreed date. Therefore, ” الرِّبَا ”
(THE RIBA) is nothing remotely similar to current banking practices.

8.Prophet (s)
prohibited the form of futures market existed in his time.

9. The practice of ”
الرِّبَا ” (THE RIBA) is prohibited or haraam and current regulated banking

practices are
permitted or halaal.

10.All contract
agreement as well as debt contracts must be written in presence of witnesses.

[T.O.
Shanavasis a native of Kerala, India, but is now based in the USA. He is an MD.
He is the author of “Islamic Theory of evolution of Evolution The Missing
Link Between Darwin and The Origin of Species.” Co-author of the book, And
God Said, "Let There Be Evolution!": Reconciling The Book Of Genesis,
The Qur'an, And The Theory Of Evolution. Edited by Prof. Charles M. Wynn
and Prof. Arthur W. Wiggins.]

Below is a posting on a similar topic which I made on another forum around six years ago. Since I make reference to an article which was, at the time, "four or five years ago", the original article must have appeared on the Islamonline.com website over ten years ago. Alas, the Islamonline website is no more, and I've been unable to find the article which prompted my post.

My post from six years ago repeated below:

******************************

The Problem with Islamic banking

Around four or five years ago, I read a very interesting article (written by a muslim on, I think, the IslamOnline website) about the problems with Islamic banking.

According to the article, a major problem with borrowing money (under Islamic law) is that investors in a business venture cannot charge interest, and are paid out of the profits of the venture. Of course, this means that an unscrupulous borrower will do everything within his power to make sure the venture loses money.

For example: they will hire their children, wife, and other relatives, and pay them large salaries which are totally unjustified based upon the actual work the relatives are doing. If the business requires the purchase of raw materials, then instead of paying a fair price on the open market, the business owner will buy the raw materials from his brother and pay him three times what the materials are worth. And so on.

A muslim in the Middle East with money to invest would much rather invest his money in a western company or bank, with a guaranteed rates of return, than take the gamble of investing in a possibly corrupt Muslim venture.

A question to ponder: if "Islamic banking" is superior to "Western banking", then why hasn't the west adopted Islamic Banking?

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